A Cognitive Perspective
Chapter 5: Strategic Decision-making Processes in SMEs: An Exploratory Study
Petra Gibcus and Peter van Hoesel 5.1 INTRODUCTION Small and medium-sized enterprises (SMEs) play a key role in the modern market economy. Strategic decisions made by small and medium-sized business entrepreneurs form the heart of entrepreneurship and can therefore be considered as essential for the dynamics in the economy. While there is an abundant literature concerning strategic decision-making in large ﬁrms, surprisingly little is known about the decision-making process within SMEs. Brouthers et al. (1998) state that past strategic decisionmaking research focuses mostly on the ‘procedural rationality’ of decisions in large multinational ﬁrms. However, many researchers have argued (for example, ibid.; Papadakis et al., 1998; Beattie, 1999; Gilmore and Carson, 2000; Cummins et al., 2001) that independent entrepreneurs (owners/directors of SMEs) and managers of large ﬁrms diﬀer when it comes to decision-making. For example, Busenitz and Barney (1997) assert that entrepreneurs are more susceptible to the use of decisionmaking biases and heuristics than are managers in large organizations. Brouthers et al. (1998) claim that intuition plays a much larger role in small ﬁrms. In 2002, EIM Business and Policy Research started a research programme that investigated the decision-making process of small and medium-sized business entrepreneurs in the Netherlands. The objective of this programme is to map the decision-making process of entrepreneurs in SMEs. The following central question was formulated: what are the stages and crucial moments in the decision-making process of entrepreneurs in SMEs? In 2002, researchers from EIM interviewed 10 entrepreneurs about the crucial factors and moments in...
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